Rapaport’s New Certs—For Ethics

August 17, 2011byRob Bates

Will Martin Rapaport become the GIA for grading ethics?

Last week, as part of a slew of announcements, Rapaport unveiled plans for an entirely new system of “certs.” The so-called “ethical certification” system for diamonds will be based on where (and how) they were mined.

Today,
I spoke to Rapaport, and he gave me a typically passionate description of his plans.

At this point, he didn’t have many specifics, and no
timeframe for his proposed system. He plans to enlist a team of auditors based
out of Surat, India, and New York, and is currently consulting with experts on supply chain management,
as well as organizations that are already working
on these issues like the RJC.

“If a factory comes to us with polished, they would have to
be able to prove which mining company that rough came from,” he says. “Most of
the factories that produce diamonds have bar codes on the envelopes to track the
stones so nobody steals. We would audit those computer systems. It’s not that dissimilar
from how
the Forevermark is doing it. It’s going to take a long time to do this, but
we are committed to it and I don’t think it’s impossible to do.”

The other question is how you determine what is ethical.
Rapaport plans to rank the stones on a scale of one to 10, and has already
formulated his hierarchy: “Fair Trade” diamonds, his longtime
pet project, are ranked first (even if, currently, they
don’t exist); “recycled” diamonds, second; and “ethically produced” diamonds—presumably
meaning those produced in places like Botswana and Canada—third.

One could quibble with this hierarchy and, there will
certainly be arguments over his (or any) definitions of “ethical.” But, as he
explains it, the system is totally voluntary and meant to provide an economic incentive to
spur good behavior.

“Not everyone wants a Triple X stone,” he says. “Not
everyone is going to want this. But for those that do, they are selling a
differentiated product. It is like, if you go to the Starbucks, there is Fair
Trade coffee and there is other coffee. It doesn’t mean the other coffee is
evil; I’m sure Starbucks is very careful. But the Fair Trade coffee exists for
the consumer who wants to pay extra for something that is extra ethical.”

“Right now, there is no financial incentive not to mix
Zimbabwe diamonds with regular goods. In fact, there is an economic incentive
to do it. This will give an economic differentiation. It’s saying you can’t mix
the kosher food with the non-kosher food … We have learned we can’t change the
world by yelling at people. We can’t change the world by fasting. But we can
create an economic benefit for doing good.”